The Collective Turn in Finance: On Commonfare and Social Wallet by Letizia Chiappini

You must be very strong
to love solitude; you have to have good legs
and a resistance out of the ordinary; you should not risk
colds, flu and sore throat; you should not fear
robbers or murderers; if you have to walk
throughout the afternoon or maybe all night
you must do it without realizing it; to sit there.

Loneliness, Pier Paolo Pasolini

In a variation on the term techno-capitalism, Nick Srnicek coined the notion of ‘platform capitalism’ to describe the current economic system, in which vulnerable segments of society become excluded and penalized. There are fundamental forces at play that cause increasing inequalities, land grabs, financial crashes and natural disasters.

In her 2014 book Expulsions[1] Saskia Sassen describes the brutality and complexity in the global economy that result in expulsions—from professional livelihood, living spaces, and even from social life. Just think about employees in 24/7 supermarkets. Or the Foodora courier that has to work through the weekend and take night shifts for a few extra bucks. Gig economy platforms recruit workers with the false promise of being a self-entrepreneur who can work whenever they please, and as much as they like. Only after starting do these workers figure out that, at the end, they are often forced to work over the weekend and compete shamelessly with other.[2]

One might think that this is nothing new under the sun; the shift-system in factories during the Fordist era was tough period for the working class as well. There have always been brutalities which were reserved for a particular portion of society: the working class, the proletarians and those that are less privileged. In the post-war period of the welfare state, or the historical momentum of the class compromise, the pledge was to improve and dignify the living conditions of individuals through work. Given the technological upheavals that shape our 21st century, working conditions may further decrease.

Nowadays, in the Western landscape factories are disappearing. The advanced phase of post-Fordism has brought about differentiated modes of production and cultural consumption. The ownership and accumulation regimes are ambiguous in terms of distribution of resources and how commodities are being produced. Hence, in this disarray it is hard to tell who belongs to the working class and who is even less privileged. Even those who think they are not yet vulnerable might soon be consumed by burnout, depression and drug abuse.

Take those who work in academia today, with its ‘publish or perish’ motto, which embodies the pressure to publish papers in peer-review journals. PhD students and researchers do not belong, by default, to the working class; they are considered high skilled workers that usually live in an expat bubble. They emigrate from their own countries to the ‘Nordic cognitive Eldorado’, to the ‘prosperous and meritocratic’ Global North. But what is the social cost for those who move abroad? Mark Fisher knew quite well at what cost: one’s life. It reminds us of the testimony by Richard Kadison, head of the mental health unit at Harvard University, according to whom the average student in the year 2000 had the same level of anxiety as the average psychiatric patient in 1950.[3]

What we are witnessing here is a platoon of precarious individuals. Look at all the freelancers, knowledge workers, crafters, makers, artists and coders. The famous creative class that has been praised for its talent, technological innovation, tolerance and inclusiveness is now falling apart. In his 2017 book The New Urban Crisis Richard Florida expresses his mea culpa because cities in which there was a high concentration of the so-called creative class are now among the most polarized cities, such as San Francisco and London. It is not a coincidence that precisely in these metropolitan areas the ideology of sharing economy is so pronounced. If you just observe this historical tragedy without thinking about possible alternatives, life fades away. So, let’s envisage alternatives together and embark on this journey. Let’s see how some of us plant the seeds and contemplate how these alternatives grow. In this article we look at initiatives in Amsterdam and Milan that represent possible ways to resist expulsion and that design collective solutions.

From welfare state to Commonfare

Commonfare is a bottom-up and open platform, which adopts a cooperative approach to welfare in order to tackle different social issues. It is based on principles of re-appropriation of the commons, free access to basic needs, unconditional universal basic income and alternative financial flows.[4] Along these social justice principles there are challenges to address: precarity vs security, online vs offline engagement, overcoming apathy and learned helplessness. The mission here is to work through such ordinary dichotomies and make concrete steps forward. One example could be the concept of ‘commoncoin’. This collective form of money is more ‘a means of exchange to flow in alternative economic circuits, than a store of value for ordinary crypto-currency.’[5]

For instance, in the Netherlands there is the phenomenon of the broodfonds, which is a collective that allows independent entrepreneurs to provide each other with temporary sick leave. The recommended minimum is 25 people; the maximum size is 50 people. From this perspective, Commonfare can be seen as a self-organized bottom-up version of social security. Another example is the social wallet, which is emblematic to understand the potentiality within platforms like Commonfare. How can we re-think the extreme individualization of the subject into a social form of finance or incomes? Andrea Fumagalli asked this question in his 2018 book Political Economy of the Common.[6]

The Social Wallet project

A social wallet is common place to store value, which is shared and accessible by a number a people. This can, for instance, be a group or collective that have the same interests or work on the same project. Let’s discuss it in detail and look at it as a design artifact. Is it made of leather or is it just a pouch, or even a string of data? Now, let’s take the traditional expression ‘pocket money’. It doesn’t matter if the pocket is in your jeans or if it is filed inside your smartphone. Of course, the main difference between the two is that in the traditional pocket there is a limited capacity to store cash and coins. In both cases, they are extremely private. A social wallet can, in theory, store both money and time. Although labor time is not the main value for the Social Wallet initiative, time is not used within the same logic of time-banking.[7] A time-based currency is an alternative currency or exchange system where the unit of account/value is the person-hour or some other time unit. Some time-based currencies value everyone’s contributions equally: one hour equals one service credit.

The experimental phase of Social Wallet started in 2013 with a European Union project called D-CENT[8]. This project itself was a collaborative policy-making tool. The initiative aimed to improve participatory design and digital tools for citizens, such as decentralized tools to engage individuals in public participation. The project aimed to build privacy-aware tools for direct democracy and economic empowerment. One of these tools was a digital wallet; which was initially called freecoin. The reason to develop this tool was to use it as an incentive for people to participate in policy-making processes. At that time there was a large monolithic application, namely a software project that included a system for authentication and authorization. Afterwards it was broken down in multiple modules.

At the time of writing in June 2018, Social Wallet is in a pilot stage. The core of the tool is entirely functional, the software developers keep improving and adding features in an agile way, as Aspasia Beneti, lead developer of the tool at Dyne.org, explained to me in an interview:

One of the pilots is Macao in Milan. It is a collective of artists. They organize themselves in a very progressive way, for instance with distributing a basic income every month. They are trying different things. Before there was a person writing excel files and keeping notes manually. Now, they use an internal wallet to be more efficient. They have a full wallet running with a particular codebase adjusted for them. They use it to distribute the basic income but also to exchange coins when they organize events, they can also gain some more coins, for example by taking care of public space or by contributing to urban commons.[9]

Macao is a small community, which uses its own social wallet for internal purposes. This means they do not need an entire blockchain[10] system to organize their activities. The collective has chosen to go for internal transparency. One of the pillars of Social Wallet is to keep the system simple for users. There is the Social Wallet API, which is the main component, where anyone can create his or her own interface. It is generic and configurable.

One could think of this as a niche product for an artist collective. That would be wrong however, it is much more! Let’s look at another example, the Santarcangelo Festival,[11] another Macao spin off. Santarcangelo is one of the oldest theater festivals in Italy, founded in 1975. For the 2018 edition they expect about 10.000 visitors. Though their experiment is different from Macao, they both try to engage citizens in technological trials. Their main difference is the attempt to be more interactive with both visitors and retailers. For instance, Santarcangelo has an app for augmented reality to read the programme and the Santa Coin[12] that is based on the Social Wallet API. One of the most interesting aspects is an adaptation for people that do not have a smartphone. Instead of a digital version, they provide a QR code, which can be printed on paper. At the entrance, visitors can exchange euros for Santa Coin. The coin can be used in bars and shops such as the hairdresser. From the organizers’ perspective, this is the easiest way to check how much the turnover of the festival is and to what degree there is an impact on the local economy.

What’s the difference between a social wallet and a token? Beneti explains:

There are a lot of similarities between the two. One of the main differences is that the social wallet is digitized, so you don’t have plastic, like token coins. It is more environmentally sustainable. It might be anything, a QR code printed on a piece of paper. It is reusable, so you can use it as a wallet. As an electronic wallet, it is an extension of the token because you can use it again and put more money on it. You can check your transactions and you can scan it. I think this is known as top-up in England. It is more transparent for the users and the festival.

Another successful example is the Bristol pound, a printed alternative or complementary currency. Instead of going to Starbucks, one can support the local economy and use the alternative currency in small local shops. It increases the trust among the local community, and it has environmental benefits. In this way, people can be incentivised to consume local products.

Think of how pervasive your smartphone is and imagine a cashless society. This is already becoming a reality in some places. A city like Amsterdam wants to encourage individuals to use less and less cash. For instance, on the tram you can only pay by card. You can order food, pay Uber, transfer money to your friends after a dinner together, all thanks to your bank app. In Southern Europe, where the digital divide is still much higher, it is not so usual to transfer money to your friends through an app. A side effect of the use of bank apps might be an extra addiction to your smartphone, such as checking compulsively how much money there is on your bank account. It is an individual financial obsessive-compulsive disorder. Let’s call this the Financial Self. It is a self that is constantly checking one’s liquidity. Whether in past this was accessible exclusively for bankers and financial brokers, this has been democratized. Now you can behave like a banker scrolling down your Instagram feed one moment and your ING-app the next.

The idea of the social wallet is an explosive one, because it stops the individualization and the narrow space of ‘me and my 25 euros on my ING-app’. The social wallet is an invitation to re-think finance in a collective way. The decision-making part is decentralized. Those who work for the social wallet are collective entities. The social move here is radical. In the common imaginary, finance has always been for brokers; think of Gekko in Wall Street or the Wolf of Wall Street. So far, global finance has been in the hands of a bunch of rich people that fight like sharks in an ocean of misery. Whereas Bitcoin is pitched to the financial elite as an alternative to the dominating currencies, the social wallet has no ambition to compete. Some might say that it is like Bitcoin. Nooooo! It is not. Bitcoin is an extension of the traditional finance ratio where the winner takes all. In this regard, the social wallet is similar to faircoin, which belongs to the world of coops and collectives, groups and communities that share what they produce. It has a redistributive effect within local economies. As Beneti remarks: ‘The social wallet can connect with a blockchain (for example faircoin) and/or a local complementary currency using a database like for example the Commoncoin in case of the Commonfare platform or the Santacoin in case of the Santarchangelo festival. It is a generic tool that can be adapted according to needs.’ The idea of the social wallet comes from the social movements!

How can initiatives like Social Wallet prevent the brutalities and expulsions of the global economy?

Social Wallet fits in a larger software ecology, often associated with the buzzword blockchain. Social Wallet is just one of the many tools in the toolbox. It represents an alternative and contributes to give collective, cooperative and economic foundation to different forms of community and self-organization. As Primavera De Filippi claims ‘These organizations—which have no director or CEO, or any sort of hierarchical structure—are administered, collectively, by all individuals interacting on a blockchain. As such, it is important not to confuse them with the traditional model of ‘crowd-sourcing’, where people contribute to a platform but do not benefit from the success of that platform.’[13]

Without becoming a believer or techno-savvy promoter, we might think about concrete solutions to avoid continuing the ocean of misery. Do we envision ourselves as a crew on Le Radeau de la Méduse or part of the victorious army of La Liberté guidant le peuple? Let’s not picture our society as failure but rather emphasize our capacity to respond and stand up. Starting from small initiatives that fight the unicorns of platform capitalism.

[9] The interview was conducted in Amsterdam in the office of Dyne.org, 6 June 2018.

[10] In 2017, Macao asked Federico Bonelli (Dyne.org) to design a game that explains how blockchain works. The idea behind Le Grand Jeu is to familiarize people these new concepts, similar to Monopoly that explains how capitalism works. Le Grand Jeu is a great example that stands in contrast to the idea of traditional urban gamification. It is not about strengthening the existing smart city projects and therefore policies, but more about how things can be reimagined together. The purpose of the game was to simulate the future economy and play with its mechanisms. For example, in order to explain how sustainable energy works, the game comes up with a potential choice between different technologies. The aim would be to choose between them, which is best for a future society. Another aim is to organize human activities in a sustainable way in order to imitate the process of transition. One could compare this with grassroots community projects that aim to increase self-sufficiency (in this case related to climate change). See: www.transitionnetwork.org and: http://www.macaomilano.org/spip.php?rubrique109.